To figure out your taxable income, you start by totaling all of the income that is not exempt from tax, such as pay from your job and any interest or dividends you have. From there, you subtract any deductions that apply to your situation and figure in the standard deduction (if it applies to your situation), which is $6,350 for single taxpayers.
Now divide this number by one minus the personal exemption amount (2016: $4,050). That’s your taxable income. This is important to know because this number will determine three other key things:
How much income you should pay tax on next,
How much tax to file, and
What your refund or credit will be.
For 2016, that number is $9,525. (You may also see it written 9,550 or 9,540.) And here's how big your refund will be: If your taxable income is $9,525 or less ($4 less than the personal exemption amount), you'll get a refund of $2,275 – the standard deduction plus another $350 for every exemption from having to pay taxes in 2016. That's $4,050 times the number of exemptions you qualified for.
If you have a taxable income above $9,525 ($4,050 plus your taxable income), but less than $37,950, you have a tax bill of $655 + $12.50 for every additional dollar over $9,525 and up to $37,950.
If your taxable income is more than $37,950 ($6,400 more than the personal exemption amount), you'll pay tax of $1,718.50 +$47.50 for every additional dollar over that limit.
Now divide this number by one minus the personal exemption amount (2016: $4,050). That’s your taxable income. This is important to know because this number will determine three other key things:
How much income you should pay tax on next,
How much tax to file, and
What your refund or credit will be.
For 2016, that number is $9,525. (You may also see it written 9,550 or 9,540.) And here's how big your refund will be: If your taxable income is $9,525 or less ($4 less than the personal exemption amount), you'll get a refund of $2,275 – the standard deduction plus another $350 for every exemption from having to pay taxes in 2016. That's $4,050 times the number of exemptions you qualified for.
If you have a taxable income above $9,525 ($4,050 plus your taxable income), but less than $37,950, you have a tax bill of $655 + $12.50 for every additional dollar over $9,525 and up to $37,950.
If your taxable income is more than $37,950 ($6,400 more than the personal exemption amount), you'll pay tax of $1,718.50 +$47.50 for every additional dollar over that limit.
